SAN JOSE (KCBS) – The demise of Proposition 19 on Tuesday has not solved the problems faced by cities struggling with the growth of the medical marijuana industry.

Voters across the state decided the growth and use of pot for recreational purposes should not be legal.

Yet San Jose voters overwhelmingly approved Measure U, opening the door for a tax of as much as 10 percent on cannabis obtained at dispensaries.

“It’s definitely a good sign of how many people in San Jose believe cannabis should be taxed and regulated,” said Dave Hodges of the San Jose Cannabis Buyers’ Collective.

KCBS’ Matt Bigler Reports:

Prop 19 Failure Won’t Stop Growth of Medical Pot Industry

Hodges said pot clubs were lobbying for a much lower tax, probably around three percent.

Measure U also establishes a framework for the city to audit the dispensaries’ books, something Hodges worries might compromise the confidentiality of some clients.

The city now has at least 81 pot clubs, growth fueled in part by outright prohibition in other regions. City Councilmember Sam Liccardo said the clubs have been a magnet for crime.

“We know there’s a lot of cash there. We’ve seen a lot of strong arm robberies. We’re seeing a lot of fires. It’s a significant public safety issue,” Liccardo said.

Liccardo lamented that San Jose’s regulations would have little effect on how doctors prescribe medical marijuana, comparing the ease of obtaining a medical marijuana card to buying a scalped Giants ticket.